aibms chargeback handbook · 2018-11-29 · aibms chargeback handbook 5 1 schemes refer to...

1AIBMS | Chargeback Handbook

AIBMS Chargeback Handbook

Managing your chargebacks

and minimising your exposure

Merchant Services


Contents

1. Introduction ............................................................................................................ 3

2. What is a Retrieval Request? ............................................................................ 3

2.1. Retrieval Request Process ................................................................................................... 3

3. What is a Chargeback? ....................................................................................... 4

3.1 Chargeback Process Overview .......................................................................................... 5

3.1.1 Chargeback Timeframes for Visa ..........................................................................................6

3.1.2 Chargeback Timeframes for MasterCard ..........................................................................7

3.1.3 Chargeback Timeframes for Union Pay .............................................................................8

3.1.4 Chargeback Timeframes for Diners .....................................................................................9

3.2 Chargebacks – Common Misunderstandings ............................................................ 9

4. Avoiding Chargebacks ......................................................................................... 9

4.1. Card Not Present ................................................................................................................ 10

5. 3D Secure for Online Payments .....................................................................11

5.1. What is 3D Secure? ........................................................................................................... 11

5.2. Why Should a Merchant Use 3D Secure? ................................................................ 12

5.3. Are There any Limitations to 3D Secure? ................................................................. 12

5.4. Which Cards are Checked by 3D Secure? ................................................................. 12

5.5. If we Join 3D Secure Can we Choose When to Use it? ...................................... 12

5.6. Will it Increase the Time our Customers Spend at Check Out? ...................... 13

5.7. Processing of pre Arbitrations ....................................................................................... 13

5.8. Benefit of undertaking 3D Secure ............................................................................... 13

6. AIBMS Online Chargeback Reporting .........................................................13

7. Defending Chargebacks....................................................................................14

7.1 Chargeback Handling Guidelines ................................................................................. 14

7.2 What NOT to send .............................................................................................................. 14

7.3 Necessary Documentation.............................................................................................. 15

8. Appendix Maestro Reason Codes ..................................................................16

9. Appendix Chargeback Reason Codes ...........................................................17

10. Appendix Chargeback Timeframes ............................................................23

10.1 Retrieval Reason Codes .................................................................................................. 24

11 Hints & Tips .........................................................................................................27


1. Introduction

This guide is aimed at providing AIBMS customers with detailed information regarding the AIBMS Chargeback process to assist you in

managing your Chargebacks and minimising your exposure.

AIBMS is here to help, once you acknowledge you have received a Chargeback notification AIBMS will engage with Merchants to support

the defence of the Chargeback.

Undefended, or late defences, may result in chargebacks being lost. Engaging with AIBMS will help avoid the loss

of the transaction and incurring associated fees.

NB: Please fax all documentation per case and not in bulk and always include the Chargeback ID no. starting with the digits 200.

If you are e-mailing please include the Chargeback ID no in the subject line to help your retrieval/chargeback to be worked as

quickly as possible.

2. What is a Retrieval Request?

A retrieval request occurs when a Cardholder’s bank requests a legible reproduction of the sales draft used in a transaction.

Common reasons for retrieval requests are:

• Point of sale errors

• Cardholder does not recognize the transaction and information is requested from the Merchant

• Required for legal analysis, if a reply is not received the card issuer may send a 2nd request

2.1. Retrieval Request Process

If a Cardholder approaches their card issuer to dispute a transaction on their bank statement the card issuer may raise a Retrieval Request prior to

raising a chargeback.

The issuing bank will raise a Retrieval Request with the Merchants Acquirer (AIBMS). The Merchant is then contacted by AIBMS requesting the

merchant supply full details of the transaction within 14 days.

A retrieval request is not a Chargeback; it is a request for information to confirm validity of the transaction. When a Merchant engages with AIBMS

in a timely manner many retrieval requests never progress to an actual Chargeback.

NB: For some Visa, UKDM and Maestro and most MasterCard Reason Codes non fulfilment of the retrieval request may invalidate

your merchant representment rights.


3. What is a Chargeback?

A chargeback is initiated by the issuing bank; either at the request of the Cardholder or when the issuing bank sees the need to do so via the schemes.

AIBMS are governed by scheme rules and regulations. Any Terms & Conditions you may have already in place with your customer would be overridden

by these.

Common reasons for chargebacks / reversals are:

• Fraud enquiries – cardholder denies participating or authorizing a transaction

• Cardholder disputes the sale for reasons such as failure to receive goods or service

• Cardholder disputes the sale for reasons of quality

• Cardholder does not recognise a transaction, It may be the clearing name on the cardholders

bank statement differs from the name on the receipt.

All Merchants accepting debit and credit card payments run the risk of being liable for chargebacks. A cardholder or card Issuer has the right to

question or dispute a card transaction.

A chargeback can be received up to 120 days after the card transaction was taken. In the case of goods or services being delivered, a chargeback can

be raised up to 120 days from agreed date of delivery.

Certain exemptions to the 120 days may apply depending on the Card Scheme1 and the reason for the dispute.

1 Schemes refer to Mastercard, Visa, Diners and Union Pay.

Retrieval Request Process Diagram


1 Schemes refer to Mastercard, Visa, Diners and Union Pay.

This diagram provides a summary of the chargeback process for all card types – Visa , MasterCard, Visa

Debit, UKDM, Union Pay (please refer to Union Pay page 8 for timeframes) and Diners.

3.1 Chargeback Process Overview

A chargeback can be received up to 120 days after the card transaction was taken. In the case of goods or services being delivered, a chargeback can

be raised up to 120 days from agreed date of delivery.

Certain exemptions to the 120 days may apply depending on the Card Scheme and the reason for the dispute.

The following diagram provides a summary of the chargeback process for all card types – Visa , MasterCard, Visa Debit, UKDM,

Union Pay (please refer to Union Pay page 8 for timeframes) and Diners.


3.1.1 Chargeback Timeframes for VisaNote: days are calendar days, not business days

Timeframe Activity

Day 0

Acquirer processes transaction.

Day 75 – 120

Cardholder can dispute transaction up until day 75 for reason codes

70, 71, 72, 73 and 78 on Visa (see Appendix for details). All other

reason codes are up to 120 days from the transaction date. In the

case where goods or services are to be delivered, Cardholders can

dispute up to 120 days from the date delivery was due.

On receipt of Chargeback

Issuer performs basic checks and if not met, forwards to scheme

following Cardholder enquiry.


Scheme forwards to Acquirer and debits Acquirer.


Acquirer contacts Merchant by post, fax or Insight report

advising of transaction and reason code, requesting required docu-

ments and informing of latest response date. Merchant account is

debited.3 Chargeback fee is applied.

Within 14 days of notification

Merchant must respond to chargeback within 14 days of

initial contact, otherwise the debit stands and case is closed.

Re-presentment within 45 days of receipt

of Chargeback by Acquirer

If the Merchant supplies documentation the team then

assess the material for adequate defence. Assessment is

always completed in accordance with scheme rules and

regulations. On represented cases a credit is applied and

the Merchant is informed by letter / fax. If unable to

represent, a debit stands and a letter / fax is sent.

30 days from representment

The Issuer has 30 days in which to raise the pre-arbitration.

The Acquirer then has 30 days to accept or reject.

60 days from representment

The issuing Bank has 60 days in which to raise arbitration.

3 For pre-note merchants only, Merchant account is debited on day 17 if a defence has not been received from the merchant.


3.1.2 Chargeback Timeframes for MasterCardNote: days are calendar days, not business days

Timeframe Activity

Day 0

Acquirer processes transaction.

Day 90 – 120

Cardholder can dispute transaction up until Day 90 for reason code

4808 on MasterCard (see Appendix for details), Day 60 for reason

codes 4801 and 4802 (see Appendix for details). All other reason

codes are up to 120 days from the transaction date. In the case

where goods or services are to be delivered, Cardholders can dispute

up to 120 days from the date delivery was due.

On receipt of Chargeback (Issuer)

Issuer performs basic checks and if not met, forwards to scheme.

On receipt of Chargeback (Card Scheme)

Scheme forwards to Acquirer and debits Acquirer.

On receipt of Chargeback (Acquirer)

Acquirer contacts Merchant by post, fax or Insight report

advising of transaction and reason code, requesting required

documents and informing of latest response date. Merchant

account is debited.4 Chargeback fee is applied.









regulations. On represented cases a credit is applied and a

chargeback fee is applied. The Merchant is informed by letter/fax.

If unable to represent, a debit stands and a letter / fax is sent.

15/45 days from representment

The Issuer has 15 for international and 30 days for domestic

transactions in which to raise the 2nd chargeback. Your account will

be debited and notification sent. You will receive a further charge-

back fee. Please respond within 14 days with further information.

45/60 days from representment

The issuing Bank has 45 days for international and 60 days for

domestic transactions in which to raise arbitration.

4 For pre-note merchants only, Merchant account is debited on day 17 if a defence has not been received from the merchant.


3.1.3 Chargeback Timeframes for Union PayNote: days are calendar days, not business days

NB: See Appendix for detailed reason codes and associated timeframes.

If a customer disputes an UP transaction we will contact you in writing and will require a response within 5 days from the date of our letter. You

can respond by post or send the information we require by email only due to timelines. Or if you prefer you can e-mail your response directly to

[email protected].

We would always recommend that your response is sent via fax or email. Any response received after the specified timeframe will mean that we

are unable to attempt a defence on your behalf.

What we will need from you:

• A legible copy of the transaction receipt from your terminal, or a manually imprinted and signed voucher in the case of

hand keyed transaction

• A copy of the chargeback letter (which will help us process this dispute quicker).

Timeframe Activity

Day 0

Acquirer processes transaction

Day -180 The cardholder can dispute a transaction up until day 180


Scheme forwards to Acquirer and debits Acquirer


Acquirer contacts Merchant by post, fax or email notification









regulations. On represented cases a credit is applied and

the Merchant is informed by letter / fax. If unable to

represent, a debit stands and a letter / fax is sent.

20 days from representment The Issuer has 20 days in which to raise the pre-arbitration.

The Acquirer then has 60 days to accept or reject.

Within 75 days after the date of the receipt of the

Second Chargeback

Arbitration may be raised.


3.1.4 Chargeback Timeframes for DinersNote: days are calendar days, not business days

If a customer disputes a Diners transaction we will contact you in writing and will require a response within 14 days from the date of our letter.

You can respond by post or send the information we require by email/fax to ROI 01 247 6486 / UK 01268 297912. Or if you prefer you can

e-mail your response to [email protected].

We would always recommend that your response is sent via fax or email. Any response received after the specified timeframe will mean that we

are unable to attempt a defence on your behalf.

What we will need from you:

• A legible copy of the transaction receipt from your terminal, or a manually imprinted and signed voucher in the case of

hand keyed transaction

• A copy of the chargeback letter (which will help us process this dispute quicker)

• Any other relevant documentation to support this enquiry i.e. proof of delivery, any correspondence such as e-mail

between you and the customer etc.

3.2 Chargebacks – Common Misunderstandings

Some common misunderstandings in relation to chargebacks include:

• An authorisation is not a guarantee of payment (very important to note for Card Not Present transactions):

An authorisation proves the card has sufficient funds available at the time of transaction and / or the card has not been reported stolen at the

time of the transaction. It does not vouch for the validity of the person using the card and is not a guarantee of payment.

• I pay the Merchant Service Charge so I will not get chargebacks:

Chargebacks are separate to the Merchant Service Charge and are costed accordingly.

• I should not be charged for the processing of chargebacks:

Processing chargebacks incurs a fee due to the administrative work required on the part of AIBMS in requesting and providing supporting

documentation to the schemes. However, most chargebacks can be avoided by Merchant vigilance and the use of fraud detection measures.

• Split Sales

Split Sales are not permitted under card schemes rules.

• Processing of Refunds

u When processing refunds please remember to process the refund to the same card and where applicable the same acquirer used

to process the transaction.

u If you take a transaction and believe it is fraudulent it is fine to process a refund within a few days of the transaction, this may stop

you receiving a chargeback. Please do not process a refund if you have already received a chargeback.

4. Avoiding Chargebacks

AIBMS recommend the following guidelines are followed to mitigate the risk of your business being exposed to chargebacks.

Please note that: Once a chargeback has been processed, a credit (i.e. Refund) should not be issues to the card holders’ account. If a

chargeback has been raised, the chargeback process must be followed.


4.1. Card Not Present

Merchants taking card not present transactions over the phone or internet should always proceed with extreme caution. Merchants assume all

liability for card not present Chargebacks in both these scenarios. Merchants transacting card not present sales over the internet can use 3D

Secure to minimize their liability.

If a Merchant does agree to a card not present order they can take some steps to protect themselves from participating in a fraud or incurring

Chargebacks.

- If Cardholder comes to pick up the goods void original transaction and process as card present. (i.e. Chip

and Pin Transaction)

Remember – Card Not Present transactions always leave the liability with the Merchant. Our best advice is not to accept Card Not

Present transactions unless it is via an internet site that is using 3D Secure.

• Declined authorisation – Do not complete a transaction if the authorisation request was declined. Do not repeat the authorisation request

after receiving a decline; ask for another form of payment.

• Transaction amount – Do not estimate transaction amounts. For example, restaurant merchants should authorise transactions only for the

known amount on the check. Tips can be added to a card transaction only if the Merchant has a Gratuity function added to their facility by

their Acquirer.

• Referrals – If you receive a “Call” message in response to an authorisation request, do not accept the transaction until you have called

your authorisation centre. In such instances, be prepared to answer questions. The operator may ask to speak with the Cardholder. If the

transaction is approved, write the authorisation code on the sales receipt. If declined, ask the Cardholder for another form of payment.

• Expired card – Do not accept a card after it’s’ expiry date unless you obtain an authorisation approval for the transaction.

• Card imprint for key-entered card-present transactions – If, for any reason, a Merchant must key-enter a transaction to complete a card-

present sale, make an imprint of the front of the card on the sales receipt. Even if the transaction is authorised and the Cardholder signs the

receipt, the transaction may be charged back to you if the receipt does not have an imprint of the embossed account number and expiration

date.

• Cardholder PIN entry / signature – The Cardholder’s PIN number / signature is required for all card-present transactions. Failure to obtain

these could result in a Chargeback if the Cardholder later denies authorising or participating in the transaction. When checking the signature,

always compare the first letter and spelling of the surname on the sales receipt with the signature on the card. If they are not the same, ask

for additional identification or make a call to your Acquirer for authorisation. Do not key a card present transaction.

• Digitised cardholder signature – Some Visa cards have a digitised Cardholder signature on the front of the card, in addition to the hand-

written signature on the signature panel on the back. However, checking the digitised signature is not sufficient for completing a transaction.

Sales staff must always compare the Cardholder’s signature on the sales receipt with the hand-written signature in the signature panel.

• Fraudulent card present transaction – If the Cardholder is present and has the card number but does not have the physical card in their

possession, do not accept the transaction. Even with an authorisation approval, the transaction can be charged back to you if it turns out to be

fraudulent.

• Legibility – Ensure that the transaction information on the sales receipt is complete, accurate, and clearly visible before completing the sale.

An illegible receipt, or a receipt which produces an illegible copy, may be returned because it cannot be processed properly. The growing use

of electronic scanning devices for the electronic transmission of copies of sales receipts makes it imperative that the item being scanned be

very legible.


• “No Chargeback” sales receipts – Some businesses have been selling to merchants “Paper Rolls” bearing a statement near the signature

area that the cardholder waives the right to charge the transaction back to the merchant. These receipts are being marketed to merchants

with the claim that they can protect businesses against Chargebacks; in fact, they do not. “No chargeback” sales receipts undermine the

integrity of the Visa /MasterCard payment system and are prohibited.

Sales-Receipt Processing

• One entry for each transaction – Ensure that transactions are entered into point-of-sale terminals only once and are deposited only once.

You may get a chargeback for duplicate transactions if you:

- Enter the same transaction into a terminal more than once.

- Deposit both the merchant copy and bank copy of a sales receipt with your merchant bank.

- Deposit the same transaction with more than one bank.

• Voiding incorrect or duplicate sales receipts – Ensure that incorrect or duplicate sales receipts are voided and that transactions are

processed only once.

• Depositing sales receipts – Deposit sales receipts with your merchant bank as quickly as possible, preferably within one to five days of the

transaction date; do not hold on to them.

• Timely deposit of credit transactions – Deposit credit receipts with your merchant bank as quickly as possible, preferably the same day the

credit transaction is generated.

• Ship merchandise before depositing transaction – For card-not-present transactions, do not deposit sales receipts with your merchant

bank until you have shipped the related merchandise. If customers see a transaction on their monthly Visa/MasterCard statement before they

receive the merchandise, they may contact their Issuer to dispute the billing. Similarly, if delivery is delayed on a card-present transaction, do

not deposit the sales receipt until the merchandise has been shipped.

• Requests for cancellation of recurring transactions – If a customer requests cancellation of a transaction that is billed periodically

(monthly, quarterly, or annually), cancel the transaction immediately or as specified by the customer. As a customer service, advise the

customer in writing that the service, subscription, or membership has been cancelled and state the effective date of the cancellation.

Customers may now cancel directly with their issuing banks any re-curring payment. If you have received a chargeback do not process any

new transactions, if a cardholder tells their bank they have cancelled, unless a refund has been processed to the card or we have absolute

proof the cardholder did not cancel we cannot defend the chargeback.

5. 3D Secure for Online Payments

5.1. What is 3D Secure?

3D Secure is the payments industry authentication standard for internet / ecommerce purchases and has been developed as a joint venture by

the major card schemes. Visa has called their version “Verified by Visa” and MasterCard have called their equivalent initiative “MasterCard Secure

Code”. Collectively, these are referred to as 3D Secure.

3D Secure authentication requires the cardholder to register their card the first time they try to purchase goods and services from an enrolled

merchant and will then be used to authenticate any future purchase at all enrolled member merchants. In order to register the cardholder must

answer several questions to which only the cardholder and card issuer will know the answer. The cardholder then selects a password and a secret

phrase which will be required during each online transaction with 3D Secure merchants in order to validate the authenticity of the person using

the card. Cardholders are strongly encouraged by card issuers to only shop online with 3D Secure registered Merchants.

3D secure is effectively the online version of “Chip & PIN” technology and used in the same way on checkout of the online sale.


5.2. Why Should a Merchant Use 3D Secure?

• When a merchant registers their online sales business with the 3D Secure program, all cardholders must either be existing registered users of

the 3D Secure program, or must register there and then to complete the purchase. Once the cardholder successfully validates their identity

and completes the sale any chargeback liability shifts from the merchant to the cardholders’ issuing bank.

• Increased cardholder confidence in the merchant, leading to potential for increased sales and repeat business.

• 3D Secure is the online payments industry’s leading security system. It provides cardholders peace of mind that the merchant is concerned

with their security as 3D Secure protects merchants and their customer from being left out of pocket by becoming victims of fraud.

5.3. Are There any Limitations to 3D Secure?

Ultimately, each Merchant is responsible for protecting themselves against fraudulent activity, however 3D Secure is a vital tool to allow

Merchants to reduce their exposure to fraud, chargebacks and their associated costs.

• 3D Secure authentication should not be used as a Merchants only fraud prevention tool, but should be used in conjunction with existing fraud

checks such as AVS and CVV2 to further minimise risk of fraud.

• 3D Secure fully protects Merchants from chargebacks arising from attempts at card fraud but a chargeback may still occur when a customer

initiates a chargeback for failure to deliver goods or services but is not happy with the goods

or services received.

5.4. Which Cards are Checked by 3D Secure?

Verified by Visa & MasterCard Secure code (known collectively as 3DSecure) will benefit the merchant in liability shift for fraudulent

E-Commerce transactions on the following cards:

• Many UK and Europe issued consumer and commercial Visa & MasterCard’s are covered under 3DS whether merchant attempted or fully

authenticated.

• Internationally issued consumer cards are covered whether merchant attempted or fully authenticated.

Note: Most internationally issued commercial cards (both Visa & MasterCard) are now covered if fully authenticated (i.e. cardholder is

enrolled and participates), although there may still be a few exceptions, in these cases the merchant may not be covered. Please see

the ECI details in 6.7 below.

5.5. If we Join 3D Secure Can we Choose When to Use it?

Once a Merchant enrolls in 3D Secure it is mandatory to use it for all transactions involving cards from Issuers enrolled in the scheme, i.e. Visa,

Visa Electron, Visa Delta, MasterCard, Maestro / Switch and solo. This affords all Merchants maximum protection.

Visa VisaElectron

Visa Delta MasterCardMaestro

(includingSwitch)


5.6. Will it Increase the Time our Customers Spend at Check Out?

3D Secure smoothly integrates into a websites checkout process and will usually only add a few seconds onto the usual transaction time. A small

price to pay for increased protection for both Merchant and Cardholder. It will also reassure the Cardholder that you are a reputable Merchant

and are protecting them against fraud.

5.7. Processing of pre Arbitrations / 2nd Chargebacks

If you receive a fraudulent related chargeback and you believe the transaction was processed 3D secure and it shows on your insight report as

either ECI 6 or 211 please send the MPI log or the Pares/Pareq, Veres/Vereq pairs, these are available from your payment service provider.

ECI 5 (Visa) or 212 (MasterCard) – transaction fully authenticated 3D secure

ECI 6 Visa or 211 (MasterCard) – transaction not fully authenticated – we would require details as above

ECI 7 (Visa) or 210 (MasterCard) – transaction not processed using 3D secure

Pre-Arbitrations Visa (MasterCard equivalent is a 2nd chargeback)

The cardholder/issuer continues to dispute the chargeback, unlike the MasterCard 2nd chargeback this will not show on your Insight report. You

will be notified by letter or fax depending on your merchant set up. Where possible please supply all the information requested in the letter.

5.8. Benefit of undertaking 3D Secure

Benefits for Merchants:

• The cardholder is certified as being genuine by their Issuer

• Provides the retailer with additional protection from fraudulent payments on-line

• Minimal impact on merchant’s interaction with consumer

• Increased sales by enhancing consumer confidence

• Reduced risk & cost of fraudulent transactions

• Decrease in disputed transactions

Benefits for Cardholder:

• The retailer is certified as being genuine

• Easy to use

• No special software is needed by the cardholder

• Enhances cardholder confidence and spending on-line’

6. AIBMS Online Chargeback Reporting

AIBMS make Chargeback reports available to our merchants via our online portal, Insight. If you do not already have access to Insight and

would like to request access, if you are a merchant with large volumes of chargebacks we have reporting available please contact your AIBMS

Relationship Manager to arrange this.


7. Defending Chargebacks

Every Merchant is contacted at the earliest opportunity as soon as the Card Scheme notifies the acquirer that a Cardholder has disputed a

transaction with their card issuer.

When a dispute has been raised merchants are contacted by their preferred method i.e. Fax, insight report email or letter. Merchants are

contacted in writing giving notice that a dispute has been raised and details of the transaction are included in the letter. In order to defend a

chargeback the following steps should be taken by the Merchant:

7.1 Chargeback Handling Guidelines

The purpose of this document is to set out the documentation required to defend a chargeback, based on the relevant reason code.

In order to ensure that your response is handled as effectively as possible and to maximise the chance of a successful defence, please only

provide the required information as set out below. Duplicates and excessive information simply delay the process.

To further assist you, we have also included a list headed ‘What not to send’ outlining the most commonly submitted documentation that is not

required.

Our aim is to do everything possible within the allotted timeframes to ensure we represent your case successfully to the card schemes. We

appreciate your assistance in helping us achieve this on your behalf.

7.2 What NOT to send

The following items are not accepted in defence of a chargeback so please do not send the following:

• Documentation in languages other than English

• Bidding history of automatic bids (e.g. for auction sites) – provide the earliest and latest bid history only.

• Photographs of websites

• Anything with an unknown password not previously agreed with the AIBMS Chargebacks team

• Generic sample payment page

• Duplications of information in several different formats – please only send information once, in black and white, in A4 size

• Terms and conditions unless signed by the cardholder.


7.3 Necessary Documentation

Information required by Chargeback type

Reason Codes Visa

Reason Codes MasterCard

Documentation Required

Refund not processed Chargeback

85

4860

Evidence that a refund has been processed. Or proof to substantiate the refund was not valid.

All Fraud-related Chargebacks

57,75,83,93,81

4863,4837, 4840,4847

If the transaction was processed as 3D secure please provide MPI log.

Customer details including delivery address and a description of what the service/goods were provided. Specifically for gaming merchants – If you can provide evidence of a long trading history or credits being paid to this same card please send through details which may enable us to defend the transaction.

All ’Goods not received’ Chargebacks

30

4855

Provide signed Proof of Delivery or proof that the service has been provided

All Cancelled re- occurring, Credit not processed and cancelled subscriptions/orders

41 4841

Due to rules changes there is no valid defence to this chargeback.

All Airline Chargebacks

41 41

Due to rules changes there is no valid defence to this chargeback.

All Authorisation Code Chargebacks

71,72,73 77 4808 ,4812, 4835

Provided a valid authorisation code

All Duplication Chargebacks

82,86 4859,4834

If more than one transaction has been processed proof that all of the transactions are valid and authorised by your customer. Or details of a refund which may have been processed to correct if the duplication was an error.

All Not as Described/ Defective damaged Chargebacks

53 4853

This should include descriptions of the goods, and any subsequent cardholder contact.

Late Presentment 74 4842

Proof of the transaction date and processing dates.

Non Transaction processed through VisaNet/ processing error.

76,80 4850

Proof the cardholder was aware of the dynamic currency conversion. Receipt to show cardholder’s authority to process transaction.


8. Appendix Maestro Reason Codes

Reason Code Description

01 Requested transaction information not received

02Requested / required information illegible or

missing

03 Warning bulletin file

04 Requested / required authorisation not obtained

05 Account number not on file

06 Transaction amount differs

07 Duplicate processing

08 Expired card

09Fraudulent transaction –

No Cardholder authorisation

16 Credit posted as debit

17 Defective/Not as Described

18 Cardholder Dispute (US only)

19 Non receipt of merchandise


20 Missing signature

21 Violated card

22Cardholder not present transaction not initiated by

a bona fide Cardholder

23 (Not used)

24Secondary identification not

recorded / not Cardholder’s

25 Old transaction

27 Pre-valid S2 card standard card

28 Old transaction

29 Pre-valid S2 card standard card

30 Fraudulent magnetic stripe

31 Fraudulent mobile phone pre-payment

32 Invalid IIN

33Fraudulent transaction at excessive counterfeit

fraud outlet


9. Appendix Chargeback Reason Codes

Code Title Description Chargeback time limit Retrieval required

1

Split Sale

In an effort to avoid the authorisation process, the Retailer splits one transaction into two or more individual sales, on the same day, that in total add up to the complete single sale value

30 days(from central processing date)

No

2 Account holder did not perform the transaction which had been PAN-key entered

Bona fide Cardholder did not carry out transaction. Card number was pan-key entered without the Cardholder being present and without the Cardholder’s authorisation

120 days (from central processing date)

No

3 Transaction exceeds floor limits

When the transaction amount is higher than the Retailer’s floor limit and the Retailer did not obtain authorisation for the transaction


No

4 Expired Card

When a transaction takes place on a Card that was expired at the time


No

5 Late Presentment

When the central processing date is more than 30 calendar days after the transaction date and only when the Cardholder disputes the delayed posting


No

6 Duplicate Processing

When there are two or more transactions on an Account that exhibit the same card number, retailer number, transaction amount, transaction type and transaction date, processing date


No

7 Refund Not Processed

When the Cardholder has proof that a Retailer was due to refund their Account but the refund has not yet been credited to their account (the Issuer must wait 15 calendar days from the refund date for the credit to be credited to the Cardholder’s Account before raising this Chargeback)


No


8

Transaction Amount Differs

The Cardholder admits to performing a transaction but when the transaction is debited to the Account the Cardholder believes that he or she was charged an incorrect amount in relation to the transaction. The Issuer charges back the difference


Yes

9 Non-receipt of Copy Voucher

Following a retrieval request, the Issuer can raise a Chargeback if the Acquirer did not respond within 45 days with a copy of the transaction receipt

Issuer must wait 45 calendar days from the retrieval request date and then process the Chargeback within 55 calendar days of the retrieval request date. (A Chargeback can only be raised if the retrieval was sent within 120 calendar days of the central processing date)

Yes

10 Requested Receipt Illegible

The Acquirer provided an illegible copy of the requested receipt

10 days from the date of receipt of illegible voucher and within 120 days from the central processing date.

Yes

11 Unauthorised Multiple Processing

When the Cardholder admits to at least one transaction at a Retailer but subsequent transactions at the same Retailer on the same day on that Card were not authorised by the Cardholder


No

12 Non-matching Account number/ Card number. Account number/ Card number not on file

When a transaction is processed on a Card that does not match any account number/card number on file


No

13

Requested Authorisation Declined

A Retailer processed a transaction after receiving a Declined Authorisation response


No

14 Invalid or No signature

The Cardholder denies participating in a transaction where the signature on the voucher is missing or completely different to the Cardholder’s

30 days from receipt of retrieval fulfillment

Yes


15 Non-compliance with Rule 12.4

A transaction is processed without compliance with Rule 12.4 which describes the required capability of all POS terminals


No

16 Cancelled Required Transaction

Where a Cardholder notifies the Issuer that either a Recurring Transaction was cancelled but the Retailer is still charging the Cardholder or the Retailer was supposed to notify the Cardholder prior to processing each Recurring Transaction but has not done so.


No


VISA Chargeback Reason Codes


30 Services Not Provided of Merchandise Not Received

41 Cancelled Recurring

53 Not as Described or Defective Merchandise

57Fraudulent Multiple Transactions = cardholder agrees to one transaction

but no more.

62 Magnetic Stripe Counterfeit Transaction

70 Card Recovery Bulletin

71Declined Authorisation = Merchant received a decline response on a sale,

but still processed transaction

72No Authorisation = Transaction has not been authorised by merchant or

maybe above the merchants floor limit

73 Expired Card

74 Late Presentment

75 Transaction Not Recognised

76

Non Transaction Currency Through Visa Net = Cardholder agreed to

transaction in another currency other than the one processed. i.e agreed

Euros but put through in sterling. The whole amount can be charged back.

77 Non Matching Account Number = incorrect/invalid card number

78

Service Code Violation = mag stripe or chip indicated that the card was

invalid for the transaction & merchant did not obtain authorisation.

Generally used on electron cards where cards can only be used

electronically & must be authorised.

80Processing Error = incorrect transaction amount, account number, altered

voucher.

81

Fraud - Card Present Environment = Applies when merchant did not

process as a chip & pin transaction or on imprint & signature (fall back)

in a card present environment. Cardholder denies participating in this

transaction.



83Fraud - Card Absent Environment = Cardholder did not authorise or

participate in transaction

85 Non Receipt of Credit Transaction Receipt

86 Paid By Other Means

90 Non receipt of Cash

93 Risk Identification Service

96 Transaction exceeds limited amount.

MasterCard Reason Codes


4802 Requested/ required item illegible or missing

4807 Warning Bulletin File

4808 Required/requested authorisation not obtained

4812 Account number not on file

4831 Transaction amount differs/ Paid by other means


4837 Fraudulent Processing of transactions

4840 Fraudulent Processing of transactions

4841 Cancelled recurring transaction

4842 Late Presentment

4846 Correct Currency code not provided

4849 Questionable merchant activity

4850 Instalment Billing Dispute


4853 Defective/ not as described

4855 Non Receipt of merchandise

4859 Addendum, no show or ATM dispute

4860 Credit not processed

4863 Cardholder not recognised

4870 Chip Liability shift

4871 Chip/ Pin liability shift


10. Appendix Chargeback TimeframesNote: days are calendar days, not business days

NB: See Appendix 9 for detailed reason codes and associated timeframes

Timeframe Activity

Day 0 Split Sale

Day 120 Issuer can raise a retrieval request up to 120 calendar days after the central processing date of the transaction. In the case where goods or services are to be delivered, cardholders can dispute up to 120 days from the date delivery was due.

Within 45 days of Retrieval request Acquirer can raise a retrieval fulfillment up to 45 days from date of Retrieval Request

Dependant on Reason Code – see Appendix

First Chargeback

On receipt of Chargeback Issuer performs basic checks and if not met, forwards to Acquirer and debits Acquirer.

On receipt of Chargeback Acquirer contacts merchant by post, fax or email advising of transaction and reason code, requesting required documents and informing of latest response date. Merchant account is debited.5

Within 14 days of notification Merchant must respond to Chargeback within 14 days of initial contact, otherwise the debit stands and case is closed.

Re-presentment within 30 days of receipt of Chargeback by Acquirer where Representment related to the supply of an Advice Slip or the supply of supporting documentation

If the merchant supplies documentation the team then assess the material for adequate defence. Assessment is always completed in accordance with scheme rules and regulations. On represented cases a credit is applied and the merchant is informed by letter/fax. If unable to represent a debit stands letter/fax is sent.

Re-presentment within 60 days of receipt of Chargeback by Acquirer in other cases than those outlined above

If the merchant supplies documentation the team then assess the material for adequate defence. Assessment is always completed in accordance with scheme rules and regulations. On represented cases a credit is applied and the merchant is informed by letter/fax. If unable to represent a debit stands letter/fax is sent.

Up to 30 days from date of the Representment (if no supporting documentation received) or up to 60 days from the date of the Representment (in any other case)

Second Chargeback can be raised.

Within 75 days after the date of receipt of the Second Chargeback

Arbitration may be raised.


10.1 Retrieval Reason Codes


VISA Request for Photocopy

28 Request for copy bearing signature

29 Request for fax draft or vehicle leasing or airline transaction

30 Cardholder/seller dispute -

31 Chargeback documentation

32 Original lost in transit

33 Legal process or fraud

34 Repeat request for copy

VISA Request for Original

35 Written cardholder/seller demand for copy

36 Legal process specifies original

37 Copy previously sent illegible

38 Required for paper/handwriting analysis or suspected counterfeit travel voucher

39 Repeat request for copy/original

40 Required for arbitration

MasterCard MasterCard Retrieval Codes

05 Cardholder does not agree with billed amount

21 Cardholder does not recognise transaction

23 Transaction information needed for cardholders personal records

41 Fraud investigation

42 Potential chageback or compliance documentation


Union Pay Retrieval Codes

Retrieval Code Description

4501 Non-Disbursement or Partial Disbursement of Cash at ATM

4502 Purchase Not Completed

4507 Dispute on Debit Adjustment

4508 Cardholder Dispute-Transaction Amount Differs

4512 Exceeds Limited or Authorized Amount


4515 Fraudulent Multiple Transactions

4522 Transaction Not Recognized

4527 Declined Authorization

4528 Cancelled Pre-Authorization

4531 Questionable Transaction Receipt

4532 Refund Not Processed

4544 Cancelled Transaction

4557 Transaction was settled but goods or services were not received

4558 Verification for Transaction Certificate (TC) Fails

4559 Transaction Certificate (TC) and Relevant Calculation Data cannot be Provided

4562 Counterfeit Card

4752 Fees Refund for Unsuccessful Balance Inquiry

4803 Prohibited Merchant


Diners Retrieval Reason Codes

Retrieval Code Description

A02 Authorization Processing Errors

A06 Unissued Account Number

B24 Charge Older than Thirty Days

B25 Duplicate Charge

B26 Alternate Settlement Currency Incorrect Exchange Rates

B27 Incorrect Currency

C41 Fraud - Card Present Transaction

C42 Fraud - Card Not Present Transaction

C46 Multiple Charges at Service Establishment Fraudulent Transaction

4501 Non-Disbursement or Partial Disbursement of Cash at ATM

4502 Purchase Not Completed

4507 Dispute on Debit Adjustment

4508 Cardholder Dispute-Transaction Amount Differs

4512 Exceeds Limited or Authorized Amount


4515 Fraudulent Multiple Transactions

4522 Transaction Not Recognized

4527 Declined Authorization

4528 Cancelled Pre-Authorization

4531 Questionable Transaction Receipt


11 Hints & Tips

Merchants to be aware of brightly coloured websites. There can be issues when these are used as a proof of payment as they don’t copy well.

Terms & Conditions page and voucher websites.

Chargeback contact details:Telephone ROI: +3531 247 6483 Fax: +353 (0) 1247 6486

Telephone UK & NI: +44(0) 1268 298981Fax: +44 (0) 1268 297912Email: [email protected]

6 Belfield Office Park, Beaver Row, Clonskeagh, Dublin 4, Ireland

How to Get in Touch

ROI: Telephone: +353 (0)1 2182100

UK & NI:Telephone Locall: 0345 266 0591 Fax: +0044(0)1268 7912Email: [email protected]

© 2014 First Merchant Processing (Ireland) Limited. All trademarks are property of their respective owners. First Merchant Processing (Ireland) Limited is a joint venture between Allied Irish Banks, p.l.c. and First Data Corporation. The joint venture is a separate legal entity from Allied Irish Banks, p.l.c and its subsidiary companies. “AIB” and the AIB logo are the registered trademarks of Allied Irish Banks, p.l.c. and are used under licence by First Merchant Processing (Ireland) Limited. First Merchant Processing (Ireland) Ltd, trading as AIB Merchant Services, is regulated by the Central Bank of Ireland.

Merchant Services

Contact us:[email protected] • www.aibms.com

aibms chargeback handbook · 2018-11-29 · aibms chargeback handbook 5 1 schemes refer to...

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